Receiving Your Deceased Wife's Social Security & Earned Income

Your pension and 401(k) distributions are not considered earned incomes by the Social Security Administration.

Your pension and 401(k) distributions are not considered earned incomes by the Social Security Administration.

If your wife dies, you may be eligible to receive survivor's benefits from the Social Security Administration. These are monthly tax-free benefits based on the work history of your wife. If you are working, you can maintain your employment and receive survivors benefits at the same time.

Income Limits

The Social Security Administration limits the amount you can earn before reducing your survivors benefits. As of 2012, if you’re not at full retirement age, you can earn up to $14,640 without a reduction to your benefits. The government agency reduces your benefit $1 for every $2 you earn over this limit. During the year you reach full retirement age, you can earn up to $38,880 prior to your birthday and your benefits are not reduced. Your survivors payments are reduced $1 for every $3 you earn over this limit. Starting with your birthday month when you reach full retirement age and beyond, there are no limits on how much money you can earn while receiving survivors benefits.

Work Wages and Self-Employment

The Social Security Administration doesn’t count all earned incomes the same. The total amount you earn in work wages is used against the annual earnings limits. However, if you’re self-employed, only the net earnings from your self-employment are counted. Also, work wages are counted when you earn it, not when it’s paid to you. An example is vacation pay you receive in the year the following year it was earned. By contrast, self-employment income is counted when you receive it, not when it’s earned. The exception is when your self-employment income was earned prior to your entitlement of survivors benefits and paid a year later. Under this scenario, your self-employment income will be counted when it’s earned.

Effects of Earned Income and Taxation

Your earnings could cause your tax-free survivors benefits to become taxable. This happens if your total income, which includes your earned income and half of your survivors benefit amounts, exceeds income guidelines. As of 2012, if you’re filing status is single, up to 50 percent of your Social Security survivors benefits are taxed at normal income tax rates if your total income tops $25,000 per year. If your annual total income is over $32,000, up to 85 percent of your survivors benefits are taxable.

Considerations

Generally you cannot remarry and receive Social Security benefits on your deceased wife’s record. However, you are entitled to survivor's benefits on her record if you remarry after age 60 -- or age 50 if you’re disabled. The taxation of your benefits still occurs if you and your current spouse’s combined incomes are substantial. Up to 50 percent of your survivor's benefits are taxed if your household income surpasses $32,000. The Internal Revenue Service taxes 85 percent of your survivors benefits if your household income is over $44,000.

 

About the Author

Rod Howell is a writer living in Charlotte, N.C. He graduated from Thaddeus Stevens College with an associate degree in administration in 2000. He published the book "Capitol Conspiracy" and regularly contributes to a blog as well as various other websites, drawing frequently from his experience as an insurance agent.

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